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Power Lunch

Today's news on the economy, markets, real estate, media and technology.

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Us 24, Ukraine 22, Russia 21, U.s. 14, S&p 8, Bhp Billiton 7, Seema 4, John Kerry 4, Bob Pisani 4, Kiev 4, China 4, Andrew Mckenzie 3, Geico 3, Usaa 3, Ge 3, United States 3, Europe 3, Royce 2, Morgan Stanley 2, Scottrade 2,
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  CNBC    Power Lunch    Today's news on the economy,  
   markets, real estate, media and technology.  

    March 4, 2014
    1:00 - 2:01pm EST  

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shenanigans. final trade? >> whole foods. >> why? >> the stock had a pull-back from the mid 60s on what was good earnings. i think it goes a lot higher. >> josh? >> sun power. say good-bye. >> pete? >> jpmorgan. >> joey? >> starbucks. >> that does it for us. big day in the market. "power lunch" picks it up. "halftime's" over. the second half of your trading day begins now. crisis? what crisis? easy for us to say here on our side of the atlantic. far more difficult to make that claim if you're in kiev or the crimea. nevertheless, the markets in the united states for sure are soaring. the dow is up 217 points. the s&p up 1.5%. the nasdaq composite up 1.75%. reports do say that tensions have eased just a bit but it didn't look like it this morning. watch this. these are troops from ukraine approaching and there's the sound of gunfire. the russians apparently fired in the air. it all ended okay as the
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commanding officers of the two sides briefly met. it is unclear why they met and what was resolved, but clearly, anything like this can turn dangerous, there can be gunfire very quickly, and things can obviously get out of control in a hurry. "power lunch" has all access today to two major companies. the ceo of john deere is with us. his company has significant business dealings in russia. and bhp billiton's ceo is also here. biggest mining company around. first to sue at the nyse. >> you really set the table for me. the s&p hitting a new all-time high today. right now, we have a gain on the s&p, considerable gain on the day. bob pisani is here to talk about that. first, we go uptown because the nasdaq, the biggest percentage mover today and the biggest percentage winner. sheila dharmarajan is going -- ladies first, right? sheila, you go first. >> the nasdaq is taking home the
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crown today, hitting a fresh 14-year high. also, the nasdaq composite up more than 1.5%. we have been talking a lot about how this is really a relief rally we are seeing today. you can see that when you see the breadth of nasdaq buying. in fact, 90% of the nasdaq 100 is higher right now. take a look at qualcomm having the most positive impact on the index after announcing it was raising its dividend by 20%, also upping its share buy-back program. microsoft, google, apple also all leading the nasdaq higher. everyone is talking about how today is all about risk on. take a look at biotech, up more than 2% on the day. also, momentum names. we like to talk about them a lot here at the nasdaq. well, they are also higher. tesla, netflix, priceline, all these names higher on the day. speaking of momentum and high-flying stocks, let's just look at 3d printing. they are really in focus today after a big earnings week. stratus and 3d higher after reporting strong results.
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we do have this talk about is tech getting too frothy, are the valuations getting too high. well, consider this. adam parker at morgan stanley is still bullish, saying look, in this type of environment it's all about growth, even though you do have some big valuations in certain sectors within tech. that's where the growth is and that's where you see investors going and particularly on a day like today, they are flocking towards a tech-heavy nasdaq index. >> understandably so. thanks, sheila. appreciate it very much. the dow is having its best day of the year. we are up almost 218 points on the trading session. now bob pisani is here. it's lifting almost all boats today. >> that's right. earlier today it was ten to one advancing to declining stocks. relief rally's a good way to describe this given what happened yesterday and the strength of the rally. midcap, historic high. small cap, russell 2000 at an historic high. the volatility in the vix, remember yesterday it went from 14 to 16?
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it went back down to 14 today, indication that tensions are easing. we don't know why. it was always unclear what the military action would be. it seems very clear we don't know what's going to happen but tanks are not going to roll into kiev. at least that's what the market is telling us. i want to show you the russell 2,000 etf, the iwm, 45 million shares changing hands. that's the same day as a full day volume. this is a big hedging vehicle used by active traders to go in and out of the market. the breadth of that, the fact it's at a new high, is indication that traders are being very active these days in etfs. right across the board, look at the sectors, cyclical stocks, defensive stocks. consumer staples up the same as consumer discretionary. industrials up the same as health care. >> let's bring in kenny pulcari. i asked ben what to do on that 200 plus down day and he said buy. you know what? that was a great call. what do you do now if you missed it? >> i'm not sure you missed it.
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i think they want to take it to 1900. just until they say we take it to 1900. it's like get that number on it, people are looking for it. this is not a huge lot of volume so again, to bob's point, it's trader driven. it's algo-driven. crisis over and boom, they rush it right up. it doesn't feel like it wants to top out until -- it will test 1900, i'm sure. then i think you will see this pull back again, this churning. >> the question is whether we keep relatively quiet the next few days on this story because then we get into the nonfarm on friday. remember, people expect not a great number because of bad weather during the week they did the survey. now we are set up for if the number's better than expected, you get another potential leg up. >> on that note, here's seema mody for a market flash. >> a lot of big movers today. take a look at chevron.
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the stock moving higher after a federal judge blocked u.s. courts from being used to collect $9 billion judgment against the oil company for rain forest damage, saying the award was obtained through fraud. the stock trading higher by around .7%. back to you. >> seema, thank you very much. secretary of state john kerry is in ukraine today. he addressed the situation in kiev about an hour ago, condemning russian aggression against ukraine. kerry said if russia doesn't pull back, there will be political and economic consequences. kerry spoke after tensions rose and then fell again in crimea. this is video of ukrainian troops marching near to russian forces, some might say provocatively. the russians fired warning shots. the ukrainians kept marching forward and after a few nervous moments, in the end the tension was defused. the commanders met. it is unclear what was said, but clearly, the situation then settled down just a bit.
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our steve sedgwick is in ukraine for us today. steve, are you getting the sense there on the ground that the situation is more calm today and i heard you spoke to the coo of a big investment bank. >> secretary of state john kerry was in town offering his full support, comforted by some of the putin comments but not all of them, of course. president putin speaking for the first time today about how he didn't see the need for force in this country but that's quite ironic given the fact that all reports say there are 16,000 russian troops in the crimean peninsula. putin's denying that russian troops are, our colleague andrea mitchell said to john kerry that putin said there are no russian troops and he was gobsmacked by it. putin's called them pro-russian self-defense forces, not russian troops. you're right, i spoke to the ceo of the biggest investment bank here. he's a russian speaker, he's a czech who has been here for 17 years.
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i said well, look, is there any problem for russian speakers in this country. he said he's seen none of it, ever, in his 17 years in the country. i mentioned he's a czech so i said to him look, people are saying is this the biggest cold war time situation since the czechoslovakia invasion in 1968 by russian forces. he said 1968, how about 1938, when the germans went in, that's where your comparison is. if you look at the kind of rhetoric used by hitler to protect those native german speakers in 1938, it's eerily reminiscent from what we've heard from the russian administration, the kremlin. >> a chilling, chilling analogy there, steve. very interesting. what is next for secretary kerry? i gather he is in kiev or has been in kiev today. where does he go from there? >> reporter: well, let me just tell you one thing that he did which was very symbolic and very important. it's pea soup behind me.
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you cannot see a thing. we have got independence square behind me. he did lay a wreath to the fallen, of course. nearly 100 people lost their lives, ousting yanukovych. he was offering real support to what he said was the legitimate government and that is flying directly in the face of putin, who said actually, the only legitimate government, legitimate president, is yanukovych who of course is hunkering down in russian territory now, so he's offering support, offering a billion dollars straight away. that one's in the bag in terms of loan guarantees for the government here. much-needed funds on the ground. offering technical assistance to root out where the theft was, to sort out corruption, to work towards those may 25th elections for new president for this country as well, offering american support there because, of course, this country needs international legitimacy and after those 25th of may elections, the hope is that even the russians can't deny we have a legitimate government in kiev. >> steve sedgwick, thanks very much. sue, down to you. let's talk more about this story.
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joining us now from capitol hill is house foreign affairs committee chairman ed royce. he's holding a hearing thursday on u.s. policy in ukraine. chairman royce, welcome. it's a pleasure to have you with us. >> thank you, sue. >> i know you still favor placing fairly significant sanctions on russia right now. specifically, what would you like the president to impose? >> well, our concern of course is you don't want putin to feel emboldened to further expand this crisis, and move on eastern ukraine and in order to prevent that, i think it's important the united states lead here with our european allies and put in place financial and economic and diplomatic leverage, and part of that would be to look at the banking system, as has been pointed out before you've got a lot of oligarchs in russia who have a lot of money in western banks and state-run banks in russia are involved in a lot of money laundering.
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so it would be very easy for the germans and the u.s. and other european powers to put together a plan that would put a tremendous amount of pressure. you already saw a collapse of about 10% in the stock market in russia. now, unfortunately, unless we get this thing solved, you are going to see a tremendous amount of upheaval but especially you are going to see it in russia itself. so our suggestion is first, isolate, isolate russia diplomatically by forcing them at the u.n. to vote against the security council resolution on the independence of the ukraine. that would hurt. second, move with sanctions legislation which we are going to be working with our counterparts on the senate side to come up with bipartisan legislation to do just this. >> you mentioned the oligarchs and one suggestion from various corners is to put visa restrictions on those oligarchs and that that, because they do tend, they are very wealthy, obviously, they tend to travel,
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they like to have their freedom, that that might in turn put some pressure on mr. putin. would that be on the table or not? >> two things are on the table here with respect to that particular class of russian society. one is visa travel but the other are asset freezes of some of the laundered funds into western europe and indeed, into the united states, and real scrutiny on the part of treasury on all this. now, this could all be worked out but what is necessary, and i noticed chancellor merkel was on the phone, she speaks russian, with putin the other day. she's trying to search for a way, she's supportive of this approach in terms of putting leverage on russia, but she's searching for this exit ramp, i think, for putin. we all recognize the history of the black sea fleet. there has to be a way here, there has to be a way forward, but what we really want to do is not send any message that would
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embolden, as i said, putin to think about doing what he's doing, has done in sevastopol, doing that in the rest of eastern ukraine there and going city hall by city hall and hoisting russian flags with his agents. that would really be a crisis. >> congressman, it will be interesting to see what sanctions are put in place and whether our european allies support those. thank you so much for joining us and spending time with us. ty? >> sue, thank you. u.s. banks and u.s. companies are exposed to the crisis in eastern europe. sara eisen reporting on the economic impact here in the united states. first, though, to kayla tausche on the banks that are most exposed to this crisis. >> secretary of state john kerry said that economic dialogue with russia is suspended but nothing to president obama's threat of freezing assets in overseas banks. if that were to happen it would be billions of dollars, largely exposure to multi-national companies operating in russia. jpmorgan had $5.4 billion in net exposure at year end. bank of america slightly higher
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at $6.7 billion. in each instance, this is a tiny percentage of overall assets. goldman and morgan stanley, we should note, had no cross border assets there. citigroup had the highest at $10.3 billion. $6.5 billion of that is in direct loans to consumers. they have 45 branches across russia and the only american consumer bank to operate there, it has no consumer presence in the ukraine but did warn in its recent annual report that volatility could put some of its $600 million in third party assets at risk. a spokesman would not comment beyond that disclosure. last week, jpmorgan's ceo jamie dimon said the single biggest risk facing his bank is geopolitics. there has been no actual change in business for the banks but that could be different for the rest of the american economy. >> we could feel that here in the u.s. economy in a few different ways. obviously rising gas prices along with energy prices on the rise in general. already trading near the highs of the year, partly on concerns about supply disruptions with
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russia and ukraine. higher grain prices as well or even food prices. ukraine, remember, is a major exporter of wheat and corn. if you pair that with some of the weather issues we have been having, you could see higher sticker prices for your food. then there are american companies with direct exposure to ukraine, like accounting firm pwc. we reached out to them. they came back to us. they actually had to close offices in two different locations. they said although they were briefly closed all of pwc's offices in the ukraine are now open. there are other american companies that we found with business in ukraine. cargill, abbott labs, both no comment. adm, no significant business impact but it's monitoring. baker mckenzie, the first international law firm to open its doors in ukraine in the early '90s, they told me they are keeping an eye on this situation under constant review and employees there are allowed to work from home. we heard that same message from the food giant mondelez.
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these are the kind of risks that investors and executives at american businesses are weighing when you look at the impact of the ukrainian conflict here in the u.s. >> thank you both very much. meantime, let's go to seema mody. >> lot of news regarding blackberry. it suffered a network outage affecting some users in canada and the asia pacific region, according to reuters. it said it has identified a potential cause and is working on a fix. earlier, the stock moved higher on a report that its qnx software system was powering apple's new car plate product. blackberry telling cnbc its qnx division has an ongoing relationship with apple and will continue with carplay. the stock up 1.7% on the day. ty? cnbc all access today on "power lunch." two ceos. both have to follow this crisis in eastern europe very closely. they have business there. interests there. bhp billiton in a few minutes. first we talk with the ceo of
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john deere. this company does a good bit of business over in russia, also has challenges in the u.s. in part because of the weather. dry out west, cold and snowy in the midwest, a lot to cover when we come back. comcast brought millions of people closer
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to nbcuniversal's coverage of the biggest olympic winter games ever, with the most coverage of the most events on every device. and the most hours of streaming video on the nbc sports live extra app, including the x1 platform from xfinity. comcast was honored to bring every minute of every medal of nbcuniversal's coverage to every screen. so what's next? rio 2016. welcome to what's next. comcast nbcuniversal. welcome back to "power lunch." take a look at shares of verizon. ceo lowell mcadams speaking at a morgan stanley media and telecom conference, said the company is looking to take more tv channels
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to mobile. key areas for the company include cloud, video, network security and the company wants to work with content partners on delivery. shares higher by 1.6%. >> seema, thank you so much. this is the biggest construction equipment trade show around and it comes as some of these construction equipment stocks hover near 52 week highs. manitowoc up 70% and terex up 40%. cat, well, they are near 52 week highs as well. jane wells is live in las vegas and is joined by the ceo of deere. hi, jane. >> reporter: hey, sue. 125,000 people, construction strong, ag not so much. the u.s. is considered really the only game in town. then there's the rest of the world. sam allen joins me. thanks again for being with us. first let's talk about russia and ukraine. you have some forestry business there. what kind of exposure do you have? >> quite a bit.
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in the ukraine it's strictly selling equipment but in the russian market, we have factory that makes large combines, large tractors. we have forestry operations, as you indicated. and we make seeding equipment so we have a number of people there and a lot of activities under way right now, trying to figure out what we're going to be doing depending upon what happens in the market, making sure that first and foremost, our people are safe, do we need to evacuate people, what do we need to do. secondly, what do we do to take care of our dealers and customers. >> reporter: there is some concern if this continues to be a problem, russian resources will be redirected away from the sorts of things that you sell. >> you know, in the short term that can always happen. in the long term, and we do view these things from a long term perspective, i know that sometimes that's difficult to understand if your horizon is six to 18 months, but russia has 9% of the world's airable land,
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20% of the world's timber reserves. russia has to be part of a positive solution for helping feed and shelter the world. we need to figure out a way to steer through all these little crises and continue to stay there. >> reporter: so much of your company is dependent on the u.s. farmer, and as one analyst said, that cycle's dropping off a cliff. what are you going to do to grow? >> first off, we don't necessarily agree with all the analysts. certainly, large ag has moved down. that's what that analyst or other analysts might say. but at the same time, livestock farmers are seeing things improve. what we would call small to midsize ag is moving up. we also have other parts of the business like construction equipment that we think are moving back up so we have some balance there from that perspective. then where i think we differ with a number of the analysts is while we agree that we could see a 12 to 18 month downturn relative to large ag in the u.s., we would argue that we are
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only one bad weather pattern somewhere in one of the major farm-producing areas of the world away from again, running into a situation where the world's supply can't keep up with demand and that's what i think people that follow us as part of commodities don't appreciate. it's not just about the demand. it's also about the supply side. it's not guaranteed in agriculture because weather has an impact on yield. >> reporter: there is a lot of chinese companies here. they want to get a toehold and looks like they may provide competition in the rental channel. when do you think those manufacturers will be a threat to the u.s.? >> we are operating as if they are right now. certainly we are in the chinese market as well but there's no doubt they are over here. one of the advantages when they come over here that we do have is they have to upgrade their equipment to now final tier four emissions so the cost advantage they used to have using a chinese engine no longer is there. and then the key for us we believe, and for a number of our
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competitors is the strength of our distribution channel. that is what we continue to focus on as a sustainable competitive advantage vis a vis some of the key competitors. >> reporter: sam allen, thanks for joining us. one of the things deere is announcing today are new telematices, information that goes directly to dealers and customers that they can download for better information about how the equipment is functioning which will make them a lot happier, i hear. >> that's right. >> reporter: back to you. >> jane, thank you very much. another big ceo interview on "power lunch" this hour. bhp billiton's ceo will join us live from a conference in houston. the stock has seen volatile trading over the past year. how has his company been affected by the crisis in ukraine? more broadly, in russia? we'll find out next. [ female announcer ] who are we?
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turning dreamers into business owners. predibut, manufacturings a prettin the united states do. means advanced technology. we learned that technology allows us to be craft oriented. no one's losing their job. there's no beer robot that has suddenly chased them out. the technology is actually creating new jobs. siemens designed and built the right tools and resources to get the job done. welcome back to "power lunch." seema mody here. big day for fuel cell makers. fuel cell energy, plug power systems soaring on news tesla is expanding in europe, specifically its super charger network. as for tesla, it continues to defy gravity, up $4 and change today. sue. >> thank you so much. i appreciate it.
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i was talking to marcus lemonis. he will be with us in a minute. first, bhp billiton seeing modest gains today, up just about half a percent. shares of the world's largest mining company have been pretty volatile over a one year period. look at that chart. sharon epperson is in houston, texas at ihs week. she has an exclusive interview with bhp billiton's ceo, andrew mckenzie. sharon? >> reporter: of course, much of the discussion here at this conference has turned from talking about global competition to of course conflict in ukraine and the tensions between russia and the west, and that is a focus i would like to start with with you, andrew mckenzie, ceo of bhp billiton. you do not have operations in russia, nor do you do much business in russia, but still, what is happening there, what is transpiring will have an impact on the global energy landscape. how do you see it? >> we do everything with a very long term perspective. so most of our investments, we are making for several decades.
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we use that long term crisis deck to decide that. we like everybody else just have to wait to see what happens over the next few weeks and what that means for the global economy and the trade in our goods and services. >> sue was talking about the fluctuations in share price and there have been brokerage firms out there talking about the declining price of iron ore, the impact that could have on your business. you have a large part of your business also in oil and gas and specifically, a big investment here in the u.s. in shale gas. how has that changed your business and how is that part of the new focus of your company? >> well, those changes have been deliberate. we have always predicted that iron ore prices would -- we talk about the cost curve flattening as new low cost supply is added at a greater rate than the increase in demand for steel, particularly in china. we have seen some evidence of this happening so far. and because of that, we have started to switch our
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investments more into things which we think will be important when china moves into more of a consumption phase. that includes things like oil and gas, copper, for example, which transports energy, and maybe longer term, fertilizers to provide better food. >> sue? >> mr. mckenzie, we are delighted to have you here on "power lunch." given the nature of your company, i would really be interested in your perspective on where we are in the economic recovery, because there are parts of main street that are not recovering as well as other parts of the economy. what's your perspective? where are we in the cycle? >> so we would -- our view at the moment looking forward this year, probably before the events of ukraine, that we were slightly biased to the upside. we feel that china is very much steady as she goes but most of the indications out of this economy in the u.s., also in europe and to some extent, japan, are on the whole more positive than they have been for some time. >> with that said, you said
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earlier in your speech today that the super cycle for commodity prices at least is over in your view. in your estimation, why has that ended and where are you looking for new opportunities? >> the super cycle in commodity prices ended quite a few years ago. the super cycle happened because china grew incredibly fast when it was going through its infrastructure phase and the people who could supply many of the raw materials for that really hadn't expanded sufficiently so there was a rush to expand and a rush to grow, and that created high prices but a lot of things were built. now growth is at a more stable basis and at the same time, with a lot of, if you like, development infrastructure in place, we can expand that more gradually and keep up with growth and demand and we are expecting more stable, probably lower prices going forward. as a consequence, we have been as a company working very hard to preserve our margins even at lower prices by cutting costs and making our capital more
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productive. >> thank you so much for joining us. andrew mckenzie, ceo of bhp billiton. more to come. back to you. >> we look forward to it. see you a little later. let's take a look at the gold market. we had a huge gain in gold yesterday, given if the ukraine fears. they are taking it all back today. the silver market also getting hit. platinum, the second day running that it's been on the down side. we do have a move to the upside in the copper market, significant because it's better than a 1% upside move. ty? a very bullish sign for the auto makers but not for car buyers. phil lebeau, what's happening? >> reporter: remember back in the day when you bought your datsun, maybe took out a loan for $10,000? ha! that's nothing compared to the latest data on what kind of car loans people are taking out. you won't believe these numbers when we show them to you in a little bit. what does marcus lemonis make of that? he used to be a car dealer. a b brand new episode of "the profit" tonight at 10:00 p.m. eastern time right here on cnbc.
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we will give you a sneak peek next. ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪
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so far, the dow industrials up 220 points at 16,388.
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the s&p 500, just about 28 points from 1900. the nasdaq, 13-year highs there, up 74, almost 75 points. meanwhile, let's go to the bond market and check in with rick santelli, who is tracking the action at the cme. rick? >> reporter: well, in front of a big report, adp in the morning, risk is on in full-fledged trading force. we're up eight basis points, you see by the intraday ten, opening up to the end of january, you can see the levels. we held that basically the third at 2.58 yield. if we look at the dollar index which really wasn't very much of a flight to safety during when the market paid attention what's going on in ukraine, certainly it's paying attention, risk on and rates moving higher. as well as the dollar strength against the yen which continues to be the best chart to watch if you want to know the risk on day and how to trade ten-year note yields. tyler, back to you. >> rick santelli, thank you very much. seema now with a market flash.
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>> take a look at cliff's natural resources, not participating in today's big rally. wells fargo downgraded the stock to underperform from market perform due to a challenging macro environment. down about 2.5%, sue? also an activist investor in that, casablanca capital. the profit is back tonight. >> so i wanted to talk to you about what happened. normally, in a situation like this, when the numbers are wrong, completely wrong, i would normally just walk away. but there's too much history, there are too many employees. you guys have too much at risk. i'm not going to let the bank take it from you. >> thank you. >> i like you guys. and i like the people that work here. >> i know the devastation that it would cause to both you guys emotionally and financially if i walked out. so i'm willing to stay and help,
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not as an investor today but as a guy who is willing to help you get things right. there's 50 people that work here. we are weeks away from closing and i don't want these people to lose their jobs. i'm going to do everything i can to ensure that that doesn't happen. i'm going to stand side by side with you, because i want to make sure that you guys are successful. >> thank you. >> marcus is with me here. always good to see you. they finally let us do it together face to face. >> that's right. tyler was hogging me. >> he was, absolutely. this is a little different profit program tonight because you are not specifically investing cash in this. you are investing your advice, you are mentoring them. >> it started differently. my initial offer was $1 million for 50% of the business. what we ended up discovering was the insolvency gap was not a million by three million. i ended up saying these aren't
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the numbers we thought they were. the due diligence process, you will find things out. >> what's amazing is this is a company that supplies all the high end restaurants not only in brooklyn, but in new york city and the fact that they didn't have control of their business, i think will be a big surprise to everybody because those steak houses, the high end restaurants, pay a lot of money for their meat. >> they do but it's a commodity market. they are operating are razor thin margins. lot of cash moving in and out in a very unsfi sfifsophisticated accounting system. >> stay with us. we will go to phil because "the profit" is on at 10:00 tonight, but you used to be an auto dealer. we said that a couple times. this story will interest you, to say the least. marcus, americans are now spending record high levels of cash for their vehicles. phil lebeau is in chicago with some of those numbers for us. what are they, phil? >> reporter: what i'm going to show you, the reaction i'm
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getting from a lot of people has been are you kidding me? almost $30,000 is the average auto loan? take a look at the latest data. this is for the fourth quarter of last year. it's a new all time record high for the average auto loan, $27,430. that's an increase of $739 compared to the fourth quarter of 2012. why are the auto loans going higher? it's because the transaction prices keep moving up. it's well over $32,000 now according to kelly blue book. in part that's because we're seeing better sales from trucks and suvs. in fact, that market is up almost 4% this year while the rest of the industry is down 1.4%. people are spreading out their loans longer, because they are borrowing more, they want to bring that monthly payment down as much as possible. look at the growth in 73 to 84 month loans, 19% increase in the fourth quarter of last year. one out of every five now, one out of every five auto loans is now for at least six years in length.
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take a look at the auto dealer stocks year to date. they are moving a little higher, certainly not having the run they had last year. one thing you can count on is that these numbers, they have been trending higher and there is no indication that we are at the tipping point yet. >> thank you, phil. marcus, what do you make of this? longer loans sound scary to me. >> there's a couple issues here. one is the mix has changed not just with the vehicle itself but people have shifted to new as opposed to used a few years ago. the manufacturers are driving that behavior by subventing the rates to 1.9, 2.9 and stretching out the term. i think the big issue that i see here, the thing that worries me the most, is that the amounts financed are higher because they are requiring less of a down payment. so when we went through the downturn, they required 10% and 20% down. we seem to have amnesia and are now asking for zero down. >> like the housing market. they did the exact same thing. >> it is. what i worry about is all these folks that are buying vehicles in the fourth quarter of 2013, three, four years from now will look to trade. the average trade cycle is around 3 1/2 years. the value of those vehicles when
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you are amortizing them over 72 months, a lot of people will be under water and we will get back to the bubble where the used car market will get robust and the new car market will get soft. >> reporter: that was a huge problem back in 2002007-2008. we are not there right now because things have improved but marcus brings up a concern to look at four or five years down the road. >> we're not there now but we will be there. >> thanks, phil, appreciate it. marcus, always good to see you. good luck with "the profit" tonight. 10:00 p.m. eastern time only on cnbc. ty? >> that's a really fascinating point. i hadn't thought about it that way. a lot of people are going to find themselves under water with a car because they have such a large loan and loan-to-value proposition. yesterday's triple digit losses on the dow. today the best day of the year. only two months old but still, we'll take it. up 227 points. ukraine fears apparently
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subsiding just a bit. the s&p 500 back to new record highs. just a few points away from 1900. small caps, midcap, any cap you like, all time highs. the biggest winners coming up. let's take a look at the most active stocks on the new york stock exchange. we'll be right back.
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get an auto insurance quote. usaa. we know what it means to serve. we know we're not the center of your life, but we'll do our best to help you connect to what is. coming up in about 15 minutes time, i will show you it is phat tuesday. our guest will explain that if you follow historical trading patterns it could also mean fat profits. also, facebook to buy a drone maker. what's its plan for the long term with this? and uber high end cars that
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can be converted into yachts. yes, cars into yachts. who would have thought? all those things and lots more, guys, coming up top of the hour. tune in and join us for "street signs." back to you. thank you very much. let's go to seema for a market flash. >> looking at the winners and losers, here's another stock not participating in today's rally. mcdermott international, the energy industry service provider fell after reporting a quarterly loss and suspending guidance for the foreseeable future as it implements some organizational changes. the stock down better than 9%. sue? >> thank you, seema. the s&p 500 hitting a new all time high. big triple digit gains in the dow. bob pisani is here with me at post nine. we really haven't deviated from the plan and the game -- >> secretary kerry spoke two hours ago. president obama spoke two hours ago. we are sitting at the exact highs that we were a couple hours ago. hold steady as she goes. remember, it's the russell 2000 also at historic highs.
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the midcap also. this is right across the board here. the breadth of it is very strong. i want to show you how many stocks are up 2% to 4%. you have railroads, airlines, fed ex, everything is up 2% to even 6% in the case of delta. big global names that do all sorts of things in many different countries, rockwell, ge, all up 2% on average. to show you how broad the rally is, even in health care, where bristol, pfizer, the biotech area, mckesson, all up 2%. this is a 2% rally. >> but kenny, is it a relief rally or is there something more to it? >> i do agree, i think it's definitely a relief rally off of what happened yesterday but i also think it's a little anticipation of the macro data coming out at the end of the week. as we said, if the non-farm payroll number comes out on friday and is in line, will they in fact sell the market because they are buying on the rumor, will they sell it on the news when it actually happens.
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>> i think the point here is we have now numbers where they believe it's going to be fairly disappointing on friday because the survey was taken during the week -- >> a bad weather week. yeah. >> i think your point is if the numbers are better than expected, that's going to be another excuse to bring us up another ten points in the s&p 500. but if it's disappointing, they will say oh, it was bad weather. >> they will ignore it. >> three months in a row we will have lousy numbers and then get a pass. >> they will just find another way to dismiss it and say don't pay attention to it. >> yeah. yeah. the market almost wants to go up and wants every excuse why there might be -- it still doesn't have to sell off. the trend is definitely on the upside. >> look at this. even the macro data out of europe this morning was not stellar by any stretch. mario is worried about deflation over there. certainly not what you want to see happening, yet european markets were all up better than 2% again on that relief rally from yesterday when they knocked them down. >> yeah. we will see.
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we have a couple more days to go. we don't know what will happen in ukraine. we don't know what will happen with the data. thank you, gentlemen, very much. to the nasdaq which is a big winner today, up more than 1.5%, hitting a 14 year high. sheila is back with us following the big movers there. hey, sheila. >> well, you guys were just talking about this 2% rally. you are seeing that loud and clear in the nasdaq as well. more than 25% of the nasdaq 100 is up over 2%. really more than 90% of the nasdaq 100 in the green. again, a broad-based relief rally we are seeing here. take a look at some of the russian tech names like yandex, qiwi. big losers yesterday, down double digits. today, we are gaining a lot of that ground back. finally, we don't have a lot of losers to talk about but there is one i want to spotlight that is intuitive surgical. it's been down the whole day on this downgrade, basically kenner saying look, we like the stock, we like the story, but we want to be more comfortable with the 2015 growth story. you know in a market like this, it is all about growth.
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so not a surprise we are seeing that downgrade there. >> sheila, thank you very much. radio shack closing more than 1,000 stores. the struggling electronics retailer had one of the most talked-about super bowl ads this past year. but was it worth the millions the company spent to air the ad? is the brand forever in trouble? go to finance.yahoo!.com and vote now. the power rundown is next. there you see the questions. give us your response. huh, fifts could save you fifteen percent or more on car insurance. everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound? ohhh...ugh. geico. little help here. i need>>that's my geico digital insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. >>ah, actually i think my eyes might ha... next! digital insurance id cards. just a tap away on the geico app.
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time for the power rundown. robert frank, bob pisani with me. radio shack plans to close 1100 stores, nearly 20% of its footprint in the u.s. weak holiday sales and a struggle overall, in today's poll we asked if you thought the brand was in trouble. 58% of you said yes. it can't compete with best buy and amazon. 14% say no, it just needs to continue refreshing and rebranding and 29% say i'm not sure but it shouldn't have wasted millions of dollars on a super bowl ad. well, i don't know. i guess if you are in trouble, robert frank, you want to juice business any way you can. >> that super bowl ad was prescient because it was all about the '80s called and they
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want their store back. they got 1,000 of them back. i think twitter has been filled with comments today from people saying how do you save radio shack. one person said change the radio to crab and make it crab shack. maybe they would do better. >> they made the cardinal sin of not becoming relevant to their audience. they used to be a geeky parts supplier in the '70s and '80s. i bought stuff there. they should have owned the mobile space and they never made that transition to owning the mobile space. now they are paying the price for it. >> i actually like radio shack. i go there a few times a year. i kind of like it. i guess i'm an old school guy. >> you must have a very full junk drawer is all i can say. >> i got more connectors and plugs and things like that, and adapters. 18-year-old student suing her parents for support after she claims they kicked her out of the house for refusing to live by their rules. man, does this sound familiar. the parents allege that their daughter is spoiled and left home on her own accord. the case heads to a new jersey court today. robert? >> well, you know, this sounds
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familiar, it's every parent's threat to say if you don't want to live by our rules, then get out of the house, we're not going to support you. this is the best of both worlds, where she gets kicked out of the house or leaves, it's unclear, but she still wants support for school and she is using lawyers to come in and fight for her. it's a very strange case and goes back to that sort of key threat that all parents use. >> bob? >> i read that article very carefully. i saw no evidence of any kind of physical abuse or even mental abuse other than the parents insisting she abide by the rules. i'm not a lawyer, i'm sorry, but the way i saw this article, i come down on the side of the parents. >> i think i'm with you on that one. let's talk about the nfl. has it become too easy for nfl kickers to kick the extra point? reports say the nfl is thinking of moving them to the 25 yard line instead of the 2 yard line for extra point attempts and obviously, if you run it in from the 2, you get two points. what do you think? good idea? should they leave a good product
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alone? >> it's become so anti-climactic. 99.9% of these kicks are now made. the kickers are just too good. i think they should judge the touchdown dance and if you do a really good touchdown dance, then you get like a point or two points. right now, it's just nobody wants to watch because they make every single point. they got to change it. >> bob? >> you're right. the old saying if it ain't broke, don't fix it, doesn't really apply in sports. if it's too boring, do something about it. when everybody makes it, it doesn't make the game very interesting. i think it's a great idea. >> i think it's a good idea. here's another one. make it a three point conversion if you go from the 20 yard line on a running or pass play and get it into the end zone. >> that's good. if you do a flip, it's an extra point. >> big caps, small caps, midcaps, any kind of cap you want, ball caps, golf caps, all time highs. three of the top winners when we return. keep in mind "unbiased". some brokerage firms are but way too many aren't. why? because selling their funds makes them more money.
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dow jones industrial average right now. let's take a look at some winners on the day. delta airlines up 5%. trip advisor up 5 1/3%. e-trade up 5 1/4%. strong day. that does it for "power lunch." "street signs" begins now. see you tomorrow. i guess the saints aren't marching in. the s&p 500 is now higher for the year. hi, everybody. every tuesday is phat tuesday on "street signs." your other hot topics, we confirmed a deal facebook is trying to make to take to the skies. what radio shack might be able to learn from jc penney? and what american car buyers are doing that should make you a little nervous. happy mardi gras. >> happy mardi gras. i feel like i'm stepping back in time a little bit here. because the markets are doi

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